Warwick Bartlett Chief Executive of industry consultancy GBGC, details to SBC the potential effects of Brexit following further details of the UK’s EU departure presented by the government last week.
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SBC: Now that PM Theresa May has confirmed that Britain will be leaving the EU Single Market, what impact do you feel the UK exit will have on the UK betting market and its stakeholders?
Warwick Bartlett: With regards to trading I doubt it will have any effect at all. In EU terms the gambling industry left the single market years ago when the European courts decided each nation could adopt its own gambling regulation.
SBC: Following last week’s announcement, what early legal and operational preparation can UK betting operators and stakeholders undertake in order to combat potential ‘Hard Brexit’ impacts?
WB: The major impact of a hard Brexit will be on the economy and how much disposable income the gambler will have to spend on gambling. A further fall in the GBP, if we have a non-negotiable Brexit, will create more inflation which again will impact on margins. Keeping costs down will be key. But I am a little more optimistic than most. After 12 months of leaving I can see real benefits in trading with the rest of the world and I am sure we will have some deal with Europe on trade. Not to do so is MAD, Mutually Assured Destruction.
SBC: Is there any possibility of UK overseas territory Gibraltar maintaining any EU special arrangements that may aid industry stakeholder operations?
WB: I watched Gibraltar’s Chief Minister, Fabian Picardo on television recently and he stated eloquently that Gibraltar was strongly British and did not want that to change. To say that Gibraltar requires a special relationship with the EU because it is at the tip of Spain is contrary to the previous statement, which is a confirmation of reality. I am afraid Gibraltar on this issue is not going to be able to have cake and eat it. But I do sympathise with their position, they have built a big industry in igaming and they wish to keep it, why wouldn’t they?
SBC: Should the UK proceed to depart the single market within two years, how do you feel this will affect the operational value chain of industry operators and service providers?
WB: Very little. Most of the providers already have offices throughout Europe. Take Playtech they are headquartered in the Isle of Man (non-EU) UK, Germany, Gibraltar, Cyprus, Israel, Bulgaria, Ukraine, Latvia, Estonia, Sweden, Russia, Philippines. If EU membership counts post Brexit they are represented in seven EU countries! Those that don’t have representation might have to place servers in the country where they are licensed and have a point of presence. That could be costly, depends on the level of revenue whether it is worthwhile. If the UK does manage to get control of its borders, then wages theoretically should rise, good for revenue but not good for control of overheads.
SBC: Moving forward, from an industry stakeholder perspective what do you feel would represent a good break from the European Union?
WB: Agreement not to contribute further to EU. Control of borders, continuation for pass porting for the City of London, although a passporting deal with the US might solve that, a trade deal similar to Canada’s with EU would be good, but EU have said they intend to be nasty to keep other member states in the club. Ten years from now we will all wonder what the fuss was all about, I think this will end up with some fudge deal, it is the very nature of things when so many countries are involved. What no one is taking account of is the shape of Europe itself over the next two years, will it hold together?
SBC: As an industry, how can UK betting/gaming stakeholders represent their operational concerns to the UK government regarding Brexit?
WB: With difficulty, because there are few reasons to complain and the UK Government is mostly concerned with finance and manufacturing at present, for a good reason, I might add.
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Warwick Bartlett – CEO of GBGC
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